India’s $5 trillion equity market is battling a $556 billion rout, with analysts cautioning that the slide could further deteriorate as growth estimates are cut. Recent fears of slowing consumption and even global economic blows have sparked foreign selling, which has further heightened the marketplace’s woes.
This is the first slump after years of bullish performance, with sectors such as technology and consumer goods taking the brunt of investor sell-offs. Analysts predict subdued corporate earnings and weakening domestic demand will continue to weigh on market sentiment.
Foreign investors, which were the backbone of the equity boom in India, have been pulling back due to worries over global recession. This withdrawal will add to the stress on a market that already wants to deal with high valuations and macroeconomic headwinds.
Though industry leaders have been battered, some are cautiously optimistic about future opportunities in areas such as green energy and infrastructure. Still, Asia’s third-largest economy has much to navigate before it can smooth out the turbulence in equity.
